How to Create Breakthrough Customer Experiences Without Breaking The Bank

Fine-tuning your company’s customer experience can feel like doing the laundry: you’re never quite finished with it. There’s always more that could be done—response times to shorten, steps to eliminate, marketing outreach to personalize. At some point, you simply run out of time or money to do it all.

What if creating memorable customer experiences didn’t have to be an expensive endeavor? What if a creating great customer experiences could actually cut costs?

Over the past several years, my colleagues and I have collected dozens of examples of companies that have done just that. We then analyzed them for patterns. What could others learn and apply to their own organizations? Three overarching lessons emerged.

One of my first jobs was as an English-as-a-Second-Language teacher in rural Denmark. I was a young, nervous first-time teacher, so for one of my first lessons, I stuck to the basics: the five-paragraph essay. Thousands of teachers have taught it before me, and thousands will teach it after me.

It didn’t go well. The students were skeptical. At first, I blamed myself—was I failing to communicate well? But then I realized that my Danish students were actually taking issue with the basic concept of the five-paragraph essay. They saw it not as a helpful guide but rather as an unbearable constraint, a dumb formula that restricted their ideas.

Until that point, I had never once second-guessed the five-paragraph essay. I taught it because it had been taught to me. I didn’t stop to consider alternatives.

Every industry is laden with wisdom about how business gets done. Best practices can be tremendous shortcuts, but as my time in Denmark showed me, they can also trap us in old perspectives. To create a great customer experience that also cuts costs, a critical first step is to recognize the “playing rules” for your market—and dare to think beyond what your industry has typically done. Doing so can open up a flood of disruptive ideas.

A great example is Build-A-Bear Workshop, a retailer that sells stuffed animals. Think about how radical that business model must have sounded in early pitches: Customers would pay large sums—perhaps $60 a piece—for the privilege of providing the free labor to make their own stuffed animal. No wonder founder Maxine Clark at first only encountered confused mall landlords, who could think of no worse idea than leasing out their space to have kids mess around with synthetic stuffing!

We know now that Build-A-Bear was ahead of its time in creating new customer experiences around retail and toys. Kids loved that they could customize how their stuffed animal looked and sounded. They relished using their own feet to pump out the stuffing. At Build-A-Bear, the making of the toy became a unique bonding experience between parent and child, or limitless entertainment at a birthday party.

The most brilliant part? Because the customers were doing the work of assembly themselves, the company could streamline its inventory to a smaller number of components. Build-A-Bear enabled endless customization without having to account for increased stock keeping units. Transportation became more efficient as well when the number of bulky items went down. Build-A-Bear became a poster child for customer experience in the toy industry—all while creating a sleek, low-cost business model.

Find the assumptions in your industry—like “retailers sell finished products”—and defy them. Just because your industry or company has always done it one way doesn’t mean that that is the best way or the only way.

Lesson #2: Be selective. Focus on what really matters to the customer, and let go of everything else

Our reality is that we have limited resources and many different initiatives vying for our time. Prioritization is always key—and it becomes even more important if cost management is one of your goals.

You won’t be able to offer it all. Choose the elements that will matter most to your customer experience, and hit them out of the park.

Take Atlassian, a blockbuster Australian firm that makes software for managing projects. It is valued at over $5.8 billion, but against all conventional wisdom, Atlassian has no sales department at all.

Instead, all prices, product information, and documentation are on the Atlassian website for prospective customers to browse at their own pace. The software itself is designed to be supremely simple to download and install by yourself. Customers train themselves using online training materials.

The 60,000 companies around the world that use Atlassian products don’t mind that the tool is more or less self-service. In fact, Atlassian’s key insight was that software developers actually prefer this low-pressure, hands-off approach. These are folks who love digging through the details themselves, and who would do almost anything to avoid a sales call.

By being selective about who it was targeting—and then nailing their customer preferences—Atlassian created a self-sustaining “marketing movement” that took the place of a traditional sales department. Atlassian users are so passionate about the software (and delighted that they are “in the know” about a great new tool) that they are more than willing to do the hard work of spreading the word about Atlassian, for free. Most of the adoption of Atlassian products comes ground-up from rank-and-file software developers, rather than from big enterprise-level contracts signed by company leaders.

Lesson #3: Hunt for CX opportunities that can streamline company operations

Customer experience is fundamentally customer-facing. But when industry professionals focus only on improving what the customer sees and touches, they overlook an enormous opportunity to innovate deeper within the business, in ways that can reduce costs.

Starbucks’ Mobile Order & Pay program, for example, was a quick win for the coffee giant. First and foremost, Mobile Order creates a phenomenal customer experience. Using the Starbucks app, customers order and pay for their drinks on their phones; a few minutes later, they are free to walk into their Starbucks store, skip the line, immediately pick up their drink, and be on their way. This shaves precious time off a harried morning commute and automates a process that is repetitive and predictable.

For Starbucks operations, the upside is even greater. Mobile ordering reduces the staffing needed at the register, freeing up baristas to make drinks—the real money-making part of the business. It also gives them more time to connect with customers. Lines become shorter for casual, walk-in customers who would otherwise be intimidated by large crowds, which increases overall foot traffic. Moreover, mobile ordering increases the number of orders that a store can accept per minute, making each store even more productive. Payments on the Starbucks app are made with pre-loaded gift card-equivalents, encouraging frequent visits and increased loyalty. Just over a year after Mobile Order & Pay was rolled out, 7% of all purchases in company-owned U.S. stores were ordered ahead, and over 1,200 stores reported 20% or more order-ahead transactions during peak times.

In your own CX work, keep an eye out for opportunities that both create great customer experiences and benefit operations in some way. Particular operational areas to look at include how you make, deliver, and sell your offering. You’ll be surprised by what you find.

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Not all CX initiatives have to result in more costs, more training, more projects, more to do. There are concrete ways to deliver what customers want, while at the same time reaping huge gains internally for the company. Be bold, stay focused, and look deeper within the company to find them.

Jennifer Luo Law is a seasoned innovation and growth strategy consultant, specializing in new market assessment and Jobs to be Done customer research.Throughout her years at New Markets Advisors, she has helped dozens of companies identify new sources of revenue and cost savings rooted in deep understanding of customer needs.A graduate of Williams College, she is a former Fulbright Fellow and previously worked at Stanford University Press.In addition to writing and consulting, she is a semi-professional dancer and speaks Mandarin Chinese.

1 COMMENT

Great post. The thing about CX is that many businesses fail to understand that if customer experience design that they have put in place is not profitable and sustainable, it won’t mean much. Often times we get bugged down with trying to delight customers in every way possible. This is a mistake. Understand the primary needs and just deliver on those.

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